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Health care eats up 30% to 40% of provincial and territorial budgets, and those costs are expected to increase at an average annual rate of 5.2% over the next decade — much faster than projected revenues. Here’s how provinces and territories are currently splitting the bill for health care.
- History of Healthcare Spending
- Healthcare Spending in Developing Countries
- International Flows of Global Health Finance
- Private Healthcare Funding
- What Affects Healthcare Spending?
- Health Returns to Investment
A long-term perspective on government healthcare spending
Nowadays healthcare is commonly considered a ‘merit good’ – a commodity which is judged that an individual or society should have on the basis of need rather than ability and willingness to pay. This view, partly grounded on the recognized positive externalities of healthcare consumption, is perhaps most visibly materialized in the fact that access to healthcare is currently a constitutional right in many countries.8 However, just a few generations ago the situation was very different. In fac...
In European countries healthcare expenditure only began rising several years after the expansion of insurance coverage
The steeper increase in public expenditure on healthcare observed in European countries after the Second World War is largely due to the fact that medicine had major breakthroughs during the second half of the 20th century – beginning, notably, with the discovery and use of penicillin and other antibiotics. Before these scientific developments took place, the main component of healthcare was not treatment but income insurance, insurance paying benefits to those who were unable to work due to...
How did insurance coverage change in the US during the period of rapid growth in healthcare expenditure in the 20th century?
The lion's share of the above-mentioned historical increase in healthcare expenditure in the U.S. took place without an underlying increase in the share of people who were covered by health insurance. The visualization supports this; it presents a plot of coverage rates by type of plan (particular care should be taken when reading this graph, as insurance plans are not mutually exclusive; this means that those covered by 'private' and 'government' plans add up to more than those covered by 'a...
How large is domestic public expenditure in developing countries after removing funds from development assistance?
The visualization – produced by the Institute for Health Metrics and Evaluation (IHME) – presents public health expenditure from autonomous sources in absolute terms (billions of 2011 U.S. dollars) for developing countries.14These numbers correspond to public healthcare expenditure after removing funds provided directly to developing countries by development assistance partners. As we can see, healthcare spending from autonomous sources has increased substantially in these countries. Below we...
The (mis)perceptions of spending on healthcare across the world
Despite significant cross-country heterogeneity in health expenditure, all countries spend less than a quarter of gross domestic product (GDP) on healthcare. As the chart shows, most countries spend between 5-12.5 percent of GDP. This is largely at odds with public perception of healthcare spending—all over the world, people grossly overestimate actual healthcare spending. The chart shows this using data from the Perils of Perception Survey (Ipsos MORI, 2016). On the vertical axis, we see the...
How large are international flows of global health financing?
The Millennium Development Goals have been associated with major increases in global health financing flows, particularly for the health focus areas explicitly targeted (fight against child mortality, maternal mortality, HIV/AIDS, malaria, and tuberculosis). An important part of these financing flows occurs under the label of development assistance. The Institute for Health Metrics and Evaluation (IHME) defines development assistance for health as all financial and in-kind contributions provi...
What are the main channels and recipients of development assistance for health?
The visualization uses aggregate 2000-2012 figures to show the relationship between sources of development assistance funds, and the corresponding channels and recipient regions. The main features here are the weight of the U.S. as a source channel, and the sub-Saharan Africa region as a recipient.
How important are out-of-pocket expenditures around the world?
In many countries an important part of the private funding for healthcare takes the form of 'out-of-pocket' spending. This refers to direct outlays made by households, including gratuities and in-kind payments, to healthcare providers. The visualization presents out-of-pocket expenditure on healthcare by country (as a percentage of total healthcare expenditure). As can be seen, in high-income countries these outlays tend to account for only a small fraction of expenditure on healthcare; while...
Donor funding for healthcare tends to decline sharply as countries get richer
Levels of income can therefore affect two aspects of healthcare financing: the magnitude of total health expenditure, in addition to the source of such funding. This is shown in the chart, which presents the best-fit global trends of total per capita health expenditure (the blue line); the share of out-of-pocket expenditure in total spending (orange line); and the share that comes from external (donor) funding (green line). Here, external funding refers to economic resources from non-resident...
Can universal healthcare coverage be realistically achieved through private expenditure?
In countries where healthcare is principally financed through public funds, out-of-pocket spending is typically low; this is natural since in these countries there is essentially universal coverage through public insurance (e.g. Cuba, UK, Sweden, France). By the same logic, out-of-pocket spending is also low in countries where healthcare is largely financed through private funds in the form of private voluntary insurance (e.g. US). It is in countries with low public healthcare spending and lo...
How strong is the link between healthcare expenditure and national income?
At a cross-country level, the strongest predictor of healthcare spending is national income. The visualization presents evidence of this relationship. The correlation is striking: countries with a higher per capita income are much more likely to spend a larger share of their income on healthcare. In a seminal paper, Newhouse (1977) showed that aggregate income explains almost all of the variance in the level of healthcare expenditure25 Other studies have confirmed that this strong positive re...
How strong is the link between healthcare expenditure and government tax revenue?
Above, we pointed out that healthcare spending from autonomous sources has increased substantially in many low and middle-income countries over the last couple of decades. The chart shows a recent snapshot of the cross-country correlation between tax revenue and healthcare spending in these countries. We can see that developing countries with higher tax revenues tend to spend more on healthcare. In fact, in a recent paper, Reeves et al. (2015) estimate the relationship between tax revenue and...
How sensitive is healthcare spending to changes in prices?
Empirical evidence suggests that healthcare spending is not only sensitive to changes in income (as discussed above), but in many instances, also sensitive to changes in prices. As it turns out, price sensitivity is so critical in low-income countries, that small costs for important healthcare products make a vast difference in demand.31 The graph, from a policy report produced by the think-tank Poverty Action Lab, summarizes the findings from a number of studies testing the link between dema...
How strong is the link between healthcare expenditure and life expectancy?
Healthcare is one of the most important inputs to produce health; and life expectancyis one of the key measures of a population's health. The visualization shows the relationship between life expectancy at birth and healthcare expenditure per capita. This chart shows the level of both measures in the first and last year for which data is available. The arrows connect these two observations, thereby showing the change over time for all countries in the world. As can be seen, countries with hig...
How strong is the link between healthcare expenditure and child mortality?
The visualization presents the relationship between child mortality– measured as the share of children dying before their fifth birthday – and healthcare expenditure per capita. The chart shows the level of both measures in the first and last year for which data is available. The arrows connect these two observations, thereby showing the change over time for all countries in the world. We can see that child mortality is declining as more money is spent on health. Focusing on change over time...
Cross-country evidence suggests substantial health returns to healthcare investment
The above-mentioned cross-sectional relationships cannot be interpreted causally because countries differ in a number of ways that simultaneously affect health outcomes and health expenditure. Income is one of them. But we can get a step closer by concentrating on countries with similar income per capita, and looking at changes across time for each country, which eliminates the potential confounding effect of country-specific time-invariant factors. The graph visualizes the relationship betwe...
Jul 24, 2024 · “The public insurance programmes are financed primarily through personal income and consumption taxes levied by both the federal and provincial governments. Two provinces – British Columbia and Ontario – retain national health care premiums for the core Medicare services.
Who pays. More than 70% of health care spending is publicly funded through general tax revenues. The provinces and territories generate 78% of the cost, with the federal government providing the rest through the Canada Health Transfer (CHT).
May 8, 2024 · Health financing is a core function of health systems that can enable progress towards universal health coverage by improving effective service coverage and financial protection. Today, millions of people do not access services due to the cost.
Jan 10, 2024 · The health care system in Canada is decentralized and publicly financed through the tax revenues of the federal, provincial, and territorial (FPT) governments.
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Jan 10, 2024 · The Canadian healthcare system is financed by using a mix of federal and provincial revenue collected through taxation, such as personal and corporate taxes, sales taxes, payroll levies, and...
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related to: how is healthcare financed incomeSee What Options You Have That May Help Lower The Costs Of Your Health Care. Learn More About How Health Insurance Works And How To Pick A Plan For You.
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The Health Insurance Marketplace offers a variety of plans to fit your budget. Affordable health insurance. Peace of mind for you and your family.